1. Field of the Invention
The present invention relates to a system and method for calculating expected payments and ultimate yield on expected payments for healthcare services and related supplies (collectively and individually referred to herein as “healthcare resources”) and more particularly a system useful by hospitals and other healthcare providers for automatically determining the best possible or maximum amount of payments a healthcare provider can lawfully expect to receive for healthcare resources which takes into account various discounts agreed upon by the healthcare provider with various private insurance companies as well as public (i.e., government) insurance providers, which administer managed healthcare plans including Medicare and Medicaid, all payments actually received against expected payments and the ultimate yield leakage on expected payments and source of leakage experienced by the healthcare provider.
2. Description of the Prior Art
Various systems are known in the art for processing payments of healthcare claims. Examples of such systems are disclosed in U.S. Pat. Nos. 5,235,507; 5,819,228; 6,341,265 and US Patent Application Publication Nos. US 2002/0123907 A1; US 2005/0159980 A1; US 2005/0033609 A1; US 2005/0273360 A1; US 2006/0167724 A1; US 2006/0190300 A1 and US 2006/0247947 A1, all hereby incorporated by reference. Systems for processing payments of healthcare claims are also disclosed in International Patent Application Publication Nos. WO 01/63516 A2 and WO 02/084437 A2 as well as Canadian Patent No. CA 2 081 737, also incorporated by reference. Such healthcare payment processing systems are used by insurance companies and government agencies for processing payments to healthcare providers. Examples of systems for processing payments to healthcare providers are disclosed in U.S. Pat. Nos. 5,235,507; 5,819,228; US Patent Application Publication Nos. US 2002/0123907 A1; US 2005/0159980 A1; US 2005/0033609 A1; US 2005/0273360 A1; and US 2006/01900300 A1 and Canadian Patent No. CA 2 081 737. Examples of systems useful by healthcare providers for facilitating payments are disclosed in U.S. Pat. No. 6,341,265; US Patent Application publication No. US 2006/0167724 A1; US 2006/0247947 A1; and International Patent Application Publication Nos. WO 01/63516 A2 WO 02/084437 A2.
In general, the current systems used by healthcare providers provide statements of current charges for all healthcare resources to insurance companies, patients and third party payers. These systems do not provide the healthcare provider with an accurate determination of the revenues that the healthcare provider is entitled to at any given point in time. These systems do not reconcile payments expected and payments received on an account by account basis across all patients. These systems do not compute the yield against expected payments realized by the healthcare provider and do not identify the sources of yield leakage or loss.
In general, payments to healthcare providers by insurance companies and government agencies are based upon agreed upon costs for such healthcare resources. More particularly, most healthcare providers contract with various insurance companies and government agencies to provide healthcare resources to patients subscribing to healthcare plans offered by such private insurance companies and public insurance (i.e., government) providers at agreed upon discount prices. Thus, when patients receive healthcare resources by healthcare providers covered by such plans, the healthcare provider submits a statement to the private insurance company and/or public insurance provider setting forth the resources provided by the healthcare provider and the standard charges for those resources.
In order to facilitate processing of claims for healthcare resources, the American Medical Association (AMA) publishes standardized procedural terminology and associated procedural codes for a myriad of healthcare services including examination, diagnostic, and procedural services. For example, current medical procedure codes are published in “Current Procedural Terminology” 4th edition, published by the AMA, hereby incorporated by reference. The procedural terminology and associated diagnostic codes promulgated by the AMA are the most widely accepted medical nomenclature used to report medical procedures and services under public and private health insurance programs. This procedural terminology is also used for administrative management purposes, such as claims processing and developing guidelines for medical care review.
The AMA also publishes codes for medical supplies, also used in processing medical claims. The current codes for medical supplies are published in: “AMA HCPCS 2007 Level II”, published by the AMA, hereby incorporated by reference.
The AMA also assigns point values to each procedure and supply code. These point values are used by healthcare providers to negotiate contracts for healthcare services with a private insurance company and/or public insurance provider. More particularly, each procedure and supply code will have an assigned point value. Each healthcare provider negotiates a “conversion factor” for a point value which enables the point values assigned for each procedure code and each supply code to be converted to dollar values.
Healthcare providers typically negotiate contracts with a multitude of private insurance companies and several public insurance providers, which administer managed healthcare plans, including Medicare and Medicaid. Unfortunately, the “conversion factors” in the various contracts negotiated with the insurance companies will differ. Since most healthcare providers bill the insurance companies directly for healthcare resources, it is extremely difficult and cumbersome to determine at any given point in time the maximum amount of payments a healthcare provider can lawfully expect to receive for healthcare resources which takes into account various discounts agreed upon with the various private insurance companies and public insurance providers. Thus, there is a need for a system for accurately and easily determining at any given point in time, the maximum amount of payments a healthcare provider can lawfully expect to receive for healthcare services which takes into account various discounts agreed upon by the healthcare provider with various private insurance and can compare the payments actually received by the provider against the expected payments. There is a further need to understand where any yield leakage is occurring and the sources/causes of the yield loss.